2024 (4) TMI 558 - AT - Service Tax

Refund of service tax paid - Construction of Residential Complexes Service - rejection on the grounds of non-submission of the required documents despite seeking time for submission of the same - HELD THAT - Commissioner (Appeals) in the impugned order has upheld the order of the original authority on the ground that no documentary proof to satisfy that their service/activity falls within the purview of Board Circular 96/2007-ST dated 23.08.2007 was submitted. The contention of the appellant that their service would fall under Works Contract was also not considered by Commissioner (Appeals) as they have not taken any registration under Works Contract and discharged appropriate service tax. In this case the appellant contends that they are not in the activity of Construction of Residential Complexes to attract levy of service tax. They have contended that they are purchasing land, building flats and selling them to the customers. They are in the business of buying and selling of flats and hence they are not liable for service tax.Nonetheless they have registered and paid service tax, realizing that they ought not to have paid service tax they have filed a refund claim for the service tax paid. However, since the required documents as proof of payment of service tax as well as non-collection of same from the buyers was not produced by way of documents, their refund claim was rejected by the original authority as well as by the first appellate authority. The required documents are not brought on record even in the appeal before this Tribunal and the appellant has not appeared for hearing on the last three occasions - the appeal filed by the appellant is dismissed.

Summary

Issues:
The issues involved in the judgment are the refund claim for service tax paid by the appellant under the category of 'Construction of Residential Complex Services' and the rejection of the refund claim due to non-submission of required documents.

Issue 1: Refund Claim based on Board Circular No. 96/2007-ST

The appellant filed a refund claim based on Board Circular No. 96/2007-ST, stating that no service tax is payable by builders or developers, but only by contractors. The appellant argued that they realized their activity was not taxable, hence the amount paid should be refunded. They contended that the transaction with flat purchasers was a simple sale of immovable property, not a construction activity for the purchasers. The appellant also raised concerns about the rejection of the refund claim due to non-submission of required documents.

Issue 2: Non-Appearance and Rejection of Refund Claim

Despite multiple hearing dates, the appellant did not appear. The authorized representative argued that the appellant's business of buying and selling property did not attract service tax under 'Construction of Residential Complexes Service'. The representative referenced Board Circular No. 96/2007-ST to support this argument. The original authority rejected the refund claim due to non-submission of necessary documents, such as original challans, sale deeds, and declarations from buyers regarding service tax payment. The Commissioner (Appeals) upheld this decision, stating that the appellant failed to provide proof aligning with the Circular's requirements.

Conclusion:
The Tribunal dismissed the appeal as the appellant failed to provide the necessary documents to support their refund claim. Despite claiming not to be in the 'Construction of Residential Complexes' activity, the appellant had registered and paid service tax. However, without proper documentation, including proof of non-collection of service tax from buyers, the refund claim was rejected at all levels of review. The appellant's non-appearance at hearings further weakened their case, leading to the dismissal of the appeal.